View source for PACICC.Comp

{| class='wikitable' style='background-color: lavender; font-size: 20px;'
|-
|| '''Notice''': Examples and Randomized Excel Practice Problems are now available.
* ''[[PACICC.Comp#Calculating_Compensation:_Example_1 | Example 1]]'' <span style="color: red;">''(A small correction was uploaded on 2025-02-24)''</span>
* ''[[PACICC.Comp#Calculating_Additional_Compensation:_Example_2 | Example 2]]'' <span style="color: red;">''(A small correction was uploaded on 2025-02-24)''</span>
* ''[[Excel_Practice_Problems | Excel Practice Problems (click me then scroll down for PACICC problems)]]''
|}

'''Reading''': “Guide to Compensation Plan for Property and Casualty Insurers,” May 2010.
* Click for ''[http://www.pacicc.ca/industry-information/coverage/ updated coverage and limit]''.

'''Authour''': Property and Casualty Insurance Compensation Corporation (PACICC)

[https://www.battleactsmain.ca/vanillaforum/categories/pacicc-comp<span style="font-size: 12px; background-color: lightgrey; border: solid; border-width: 1px; border-radius: 10px; padding: 2px 10px 2px 10px; margin: 0px;">'''Forum'''</span>]

{| class='wikitable' style='background-color: navajowhite;
|-
|| '''BA Quick-Summary''': <span style="color: green;>'''Compensation After Insolvency'''</span>

* PACICC stands for ''Property And Casualty Insurance Compensation Corporation''. The purpose of PACICC is to provide compensation AFTER insolvency ''(whereas the purpose of OSFI is to PREVENT insolvencies.)''
* You need to know how to calculate the compensation a policyholder receives when their insurer goes bankrupt. Variations of that question have appeared on the exam several times on available published exams.

|}

==Pop Quiz==

List 4 <u>internal</u> causes of insurer insolvency. [Hint: <span style="color: red;">'''GoNGS'''</span>.]

==Study Tips==
This reading is only 7 pages long, and is not difficult. Most of the questions tested on prior exams require you to calculate PACICC compensation, with others testing you on procedures, purpose, and funding of the PACICC. I would suggest reading through quickly to get a brief understanding of the operations and the roles of the PACICC, liquidator, claimants of the insolvent insurer, and solvent member insurance companies.

Focus on memorizing:
* Purpose of the PACICC
* 4 funding mechanisms
: &rarr; Note that only 3 are now accepted by the CAS graders. See ''[[PACICC.Comp#Funding_and_Assessment | Funding and Assessment]]'' for details. 

As mentioned above, calculational questions include:
* Policyholder recovery/compensation in the event of an insolvency
* (Insurer assessment - note that this is a low probability question)

==BattleTable==

Based on past exams, the '''main things''' you need to know ''(in rough order of importance)'' are:
* <span style='color: green;'>'''Calculate compensation'''</span> to policyholder after insurer goes insolvent
* Calculate <u>assessment</u> on insurer ''(for funding of PACICC)''
* Miscellaneous facts about PACICC: <u>purpose</u>, <u>procedures</u>, <u>trigger</u> for financial responsibility

Calculating PACICC compensation to the policyholder in the event of an insolvency was a popular question up through '''2015.Spring''', but not so much recently. ''Did the exam committee decided it wasn't important?'' Still, it's pretty easy. Don't skip it!

[https://battleactsmain.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=&prefix=PACICC&suffix=Comp&section=all&subSection=all&subsetFlag=TopQReading&examRep=all&examYear=all&examTerm=all&quizNum=0&select07=0&select08=0&select09=0<span style="font-size: 20px; background-color: gold; border: solid; border-width: 1px; border-radius: 10px; padding: 2px 10px 2px 10px; margin: 10px;">'''Top Questions]'''</span> <span style="color: red;">''&larr; Questions you <u>absolutely</u> need to know!'' </span>

{| class='wikitable'
|-
| Questions held out from Fall 2019 exam: '''#10'''. ''(Skip these now to have a fresh exam to practice on later. For links to these questions, see [[Exam Summaries]].)''
|}

: {| class='wikitable' style='width: 1000px;'

|-
! style='width: 175px;' | reference !! style='width: 175px;' | part (a) !! style='width: 175px;' | part (b) !! style='width: 175px;' | part (c) !! part (d)

|-
|| [https://www.battleactsmain.ca/pdf/Exam_(2019_1-Spring)/(2019_1-Spring)_(10)_v2.pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style="color: red;">'''(2019.Spring #10)'''</span>
|| [[CAS.GovtIns]]
|| '''(i)''' evaluate PACICC <br> '''(ii)''' [[IBC.Flood]]
| style="background-color: lightgrey;" | 
| style="background-color: lightgrey;" | 

|-
|| [https://www.battleactsmain.ca/pdf/Exam_(2019_1-Spring)/(2019_1-Spring)_(12)_v2.pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style="color: red;">'''(2019.Spring #12)'''</span>
|| <span style='color: green;'>'''calculate compensation'''</span> <span style="color: red;"><sup>'''1'''</sup></span>
|| <span style='color: green;'>'''calculate compensation'''</span>
|| '''PACICC funding''': <br> - methods
| style="background-color: lightgrey;" | 

|-
|| [https://www.battleactsmain.ca/pdf/Exam_(2018_2-Fall)/(2018_2-Fall)_(13).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style='color: red;'>'''(2018.Fall #13)'''</span>
|| [[Dibra.Fail]]
|| <span style='color: green;'>'''calculate compensation'''</span>
| style="background-color: lightgrey" | <br> <br>
| style="background-color: lightgrey" |

|-
|| [https://www.battleactsmain.ca/pdf/Exam_(2017_2-Fall)/(2017_2-Fall)_(12).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style='color: red;'>'''(2017.Fall #12)'''</span>
|| '''purpose''': <br> - of PACICC
|| '''procedures''': <br> - of PACICC
|| see [[Dibra.Fail]]
| style="background-color: lightgrey" |

|-
|| [https://www.battleactsmain.ca/pdf/Exam_(2016_2-Fall)/(2016_2-Fall)_(01).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style='color: red;'>'''(2016.Fall #1)'''</span>
|| '''purpose''': <br> - of OSFI
|| See [[McD.Intro]]
| style="background-color: lightgrey" |
| style="background-color: lightgrey" |

|-
|| [https://www.battleactsmain.ca/pdf/Exam_(2015_1-Spring)/(2015_1-Spring)_(13).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style='color: red;'>'''(2015.Spring #13)'''</span>
|| <span style='color: green;'>'''calculate compensation'''</span>
| style="background-color: lightgrey" | <br> <br>
| style="background-color: lightgrey" |
| style="background-color: lightgrey" |

|-
|| [https://www.battleactsmain.ca/pdf/Exam_(2014_2-Fall)/(2014_2-Fall)_(11).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style='color: red;'>'''(2014.Fall #11)'''</span>
|| '''costs''': <br> - involuntary exits
|| <span style='color: green;'>'''calculate compensation'''</span>
| style="background-color: lightgrey" |
| style="background-color: lightgrey" |

|-
|| [https://www.battleactsmain.ca/pdf/Exam_(2014_1-Spring)/(2014_1-Spring)_(08).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style='color: red;'>'''(2014.Spring #8)'''</span>
|| '''PACICC assessment''': <br> - formula
| style="background-color: lightgrey" |
| style="background-color: lightgrey" |
| style="background-color: lightgrey" |

|-
|| [https://www.battleactsmain.ca/pdf/Exam_(2013_2-Fall)/(2013_2-Fall)_(11).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style='color: red;'>'''(2013.Fall #11)'''</span>
|| <span style='color: green;'>'''calculate compensation'''</span>
|| <span style='color: green;'>'''calculate compensation'''</span>
|| '''trigger''': <br> - PACICC responsibility
| style="background-color: lightgrey" |

|-
|| [https://www.battleactsmain.ca/pdf/Exam_(2012_2-Fall)/(2012_2-Fall)_(17).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style='color: red;'>'''(2012.Fall #17)'''</span>
|| '''SCENARIO''': <br> - soundness of PACICC
|| see [[Dibra.Fail]]
| style="background-color: lightgrey" |
| style="background-color: lightgrey" |

|-
|| [https://www.battleactsmain.ca/pdf/Exam_(2012_2-Fall)/(2012_2-Fall)_(20).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style='color: red;'>'''(2012.Fall #20)'''</span>
|| <span style='color: green;'>'''calculate compensation'''</span>
|| <span style='color: green;'>'''calculate compensation'''</span>
| style="background-color: lightgrey" | <br> <br>
| style="background-color: lightgrey" |

|}

: <span style="color: red;"><sup>'''1'''</sup></span> Parts (a) and (b) of this question are defective. The loss amount was not provided and you could not solve the problem without it. You had to make an assumption regarding the loss amount and the examiner's report accepted any assumption.

==In Plain English!==

===Intro and Basic Facts===

PACICC stands for Property and Casualty Insurance Compensation Corporation.

:{| class="wikitable"
|-
| The '''purpose''' of PACICC is to provide a reasonable level of '''policy holder recovery''' for claims & unearned premium AFTER a P&C insurer becomes insolvent.
|}

This policyholder recovery 'plan' is administered by the non-profit PACICC. <u>Members</u> of PACICC include all participating insurers in a jursidiction, with some exceptions. ''('''Ex''': reinsurers.)'' Note that a <u>participating</u> insurer is simply a licensed insurer selling a class of business covered by PACICC. This is all pretty easy, right! Just a couple of more basic facts before we look at the actual calculations & process:

:{| class="wikitable"
|-
| '''Question''': Identify the <u>types</u> of policies covered by PACICC
|}

:* <u>Most</u> P&C policies are covered by PACICC ''(life insurers have their own similar plan so these are excluded)''
:* '''Exclusions''':
::: - Automobile insurance sold by Government-owned insurers in Manitoba & Saskatchewan ''(auto insurance is provided by Crown Corporations, not private insurers)''
::: - Mandatory auto coverage sold in British Columbia <span style="color: red;">'''(added Feb 23, 2023)'''</span> <span style="color: green;">'''''(optional auto coverages are covered by PACICC, such as Collision, Comprehensive, Loss of Use, etc)'''''</span>
::: - Aircraft, credit, crop
::: - Directors' and officers', employer's liability, certain errors and omissions <span style="color: green;">'''''(medical malpractice is <u>not</u> excluded)'''''</span>
::: - Fidelity, financial guarantee, marine, mortgage, surety and title insurance
::: - Bodily Injury coverage in Quebec when covered by Société d'assurance automobile

This is a long list of exclusions and I don't think you need to memorize it. Virtually all of the old exam problems involve '''auto''' or '''property'''. If you read this list once or twice and just remember that most of the exclusions are ''unusual'' policy types you should be ok. Note that some types of auto policies <u>are</u> excluded however, namely mandatory auto coverage sold in BC, Saskatchewan, and Manitoba.

An exam question may try to trick you by asking you to calculate the compensation for an aircraft policy. You would have to remember that aircraft is an ''unusual'' policy that isn't covered by PACICC. The compensation would therefore be 0.

[https://battleactsmain.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=PACICC&suffix=Comp&section=all&subSection=all&examRep=all&examYear=all&examTerm=all&quizNum=1<span style="font-size: 20px; background-color: aqua; border: solid; border-width: 1px; border-radius: 10px; padding: 2px 10px 2px 10px; margin: 10px;">'''mini BattleQuiz 1]'''</span> <span style="color: red;">'''You must be <u>logged in</u> or this will not work.''' </span>

===Calculating Compensation: Example 1===

The following example is modeled on [https://www.battleactsmain.ca/pdf/Exam_(2019_1-Spring)/(2019_1-Spring)_(12)_v2.pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style="color: red;">'''(2019.Spring #12)'''</span>, but with different inputs.

After you've studied the example below: ''[[Excel_Practice_Problems | Excel Practice Problems (click me then scroll down for PACICC problems)]]''

* ''(Problems 1,2,3 in that Excel file are like the problem below but with different inputs.)

{| class='wikitable'
|-
|| Here's the problem...
|}

: [[File: PACICC.Comp_(010)_example_10_(v02).png]]

{| class='wikitable'
|-
|| Here's the solution...
|}

: [[File: PACICC.Comp_(011)_example_10_(v02).png]]

===Calculating Additional Compensation: Example 2===

This is example is slightly different from Example 1. Here, the policyholder has already received a distribution from PACICC, but not for the full amount due. An additional amount is paid to the policyholder after the insolvent insurer has been liquidated and PACICC has received additional funds from the liquidator.

After you've studied the example below: ''[[Excel_Practice_Problems | Excel Practice Problems (click me then scroll down for PACICC problems)]]''

* ''(Problems 4,5,6 in that Excel file are like the problem below but with different inputs.)

{| class='wikitable'
|-
|| Here's the problem...
|}

: [[File: PACICC.Comp_(050)_example_11_(v02).png]]

{| class='wikitable'
|-
|| Here's the solution...
|}

: [[File: PACICC.Comp_(051)_example_11_(v03).png]]

===Explanation of 2015.Spring #13===

Here is an old exam problem that has a related forum discussion: ''[https://battleactsmain.ca/vanillaforum/discussion/25/pacicc-compensation-2015-spring-13 forum discussion]''.

{| class='wikitable' style='background-color: yellow;'
|-
|| '''2025-Spring Update''': Change in coverage limits
|}

* Everything is the same except the coverage limits. Exam problems from 2020.Fall and prior use old limits, which have undergone several inflationary changes. ''(Technically, these problems are now outdated because of the new limits, but the formulas are the same.)'' Beginning 2025.Spring, the limits listed below are in effect:

: &rarr; new limit for auto: '''$415,000''' ''(limit was $250,000 at the time of this paper)''
: &rarr; new limit for HO: '''$520,000''' ''(limit was $300,000 at the time of this paper)''
: &rarr; refunding of unearned premium: '''70% x $2,500''' ''(limit was 70% x $1,000 at the time of this paper)

As you look at these old exam problems, keep these new limits in mind.

Let's look at: [https://www.battleactsmain.ca/pdf/Exam_(2015_1-Spring)/(2015_1-Spring)_(13).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style="color: red;">'''(2015.Spring #13)'''</span> ''(Note that the examiner's report provides 2 acceptable solutions. This is discussed in the forum [https://www.battleactsmain.ca/vanillaforum/discussion/25/pacicc-compensation-2015-spring-13 here].)''

Given:

:{| class="wikitable"
|-
| '''unearned premium:''' || style="text-align: right" | 500
|-
| '''claim:'''            || style="text-align: right" | 400,000
|-
| '''deductible: '''      || style="text-align: right" | 1,000
|-
| '''distribution from InsR:''' || style="text-align: right" | 350,000
|}

There is more than one accepted solution due to the interpretation of "Distribution from the insurer". This solution treats it as a partial claim payment that was made to the insured <u>before</u> insolvency, whereas solution 2 treats it as a payment from the liquidator to the PACICC. Solution 2 is more in line with how the PACICC process currently functions. Please see the ''[https://battleactsmain.ca/vanillaforum/discussion/25/pacicc-compensation-2015-spring-13 forum discussion]'' or the '''Distributions''' section below for solution 2. 

The basic formula is easy enough:

:{| class="wikitable"
|-
| '''Recovery''' = (Unearned premium component) + (Indemnity component)
|}

: Now,

:: '''Unearned premium component = ''' 70% x min(1,000, Unearned premium) = 70% x min(1,000, 500) '''= <u>350</u>'''

: and,

:: '''Indemnity component = ''' min(Loss - Distribution - Deductible, 300,000) = min(400,000 - 350,000 - 1,000, 300,000) '''= <u>49,000</u>'''

Therefore,

: {| class="wikitable" 
|- style="background-color: lightgreen;"
| '''recovery =''' 350 + 49,000 '''= 49,350'''
|}

====Complications to the Calculation====

The value of 300,000 used in the formula for the indemnity component '''depends on''' whether the insurance policy is personal property or auto.

: '''auto:''' use 250,000
: '''personal property:''' use 300,000

Also, the unearned premium is not always given. You may have to calculate the unearned premium based on the policy inception date and the insurer's insolvency date.

====Distributions====

The term ''distribution'' arises from time to time. This is what it means:

* In the indemnity formula, ''distribution'' refers to money the policyholder received from the insurer. In '''2015.Spring #13''', the policyholder received a distribution of 350,000 from their insurer for their claim of 400,000. Since the policyholder still had money owed to them, they may receive another distribution from the PACICC for 50,000.

* There is also an example in the source text discussing '''distribution from a liquidator'''. In this example the policyholder received 250,000 of their 300,000 automobile claim directly from PACICC. Now, PACICC doesn't have its own money and must recover this 250,000 from liquidating the insolvent insurer ''(or the other insurers that are still solvent, or the compensation fund)'' before the policyholder gets any more money.
:: '''Case 1''': If the liquidator makes a distribution of 150,000 ''(which just means the liquidator gives 150,000 to PACICC)'' then the insured <u>wouldn't</u> get any additional funds because the 150,000 the PACICC recovered doesn't cover the original 250,000 advanced to the policyholder.
:: '''Case 2''': If the liquidator makes a distribution of 275,000 to PACICC ''(gives 275,000 to PACICC)'' then the original 250,000 is covered and the policyholder <u>would</u> receive the leftover 25,000. The policyholder would still be 25,000 short and whether they get this back depends on whether PACICC gets any more money from its funding sources. 

: In the context of 2015.Spring #13, this means that the PACICC has already advanced the policyholder the amount for their claim: min(400,000 - 1,000, 300,000) = 300,000 and UEP: 70% x min(1,000, 500) = 350. The PACICC then recovers 350,000 from the liquidator of the insolvent insurer, where they are reimbursed for the 300,350 they already provided to the policyholder. They are also able to provide an additional 49,650. Note that the policyholder is still short 50,000 and whether they get this back depends on whether PACICC gets any more money from its funding sources.

[https://battleactsmain.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=PACICC&suffix=Comp&section=all&subSection=all&examRep=all&examYear=all&examTerm=all&quizNum=2<span style="font-size: 20px; background-color: aqua; border: solid; border-width: 1px; border-radius: 10px; padding: 2px 10px 2px 10px; margin: 10px;">'''mini BattleQuiz 2]'''</span> <span style="color: red;">'''You must be <u>logged in</u> or this will not work.''' </span>

===Funding and Assessment===

Here is a question that has appeared on more than 1 exam:

:{| class='wikitable'
|-
|| '''Question''': identify funding mechanisms for PACICC [Hint: <span style="color: red;">'''AC-3'''</span>]
|}

:: <s><span style="color: red;">'''L'''</span>'''iquidation''' of the insolvent insurer's assets</s> <span style="color: red;">'''&larr; The CAS no longer accepts this answer.'''</span> See ''[https://www.battleactsmain.ca/vanillaforum/discussion/1089/2019-fall-q10b#latest this forum post]'' for further details.
:: <span style="color: red;">'''A'''</span>'''ssessment''' of participating insurers
:: <span style="color: red;">'''C'''</span>'''ompensation Fund ''' &ndash; borrow money from this fund to cover short-term cashflow when required ''(pre-insolvency funding)''
:: <span style="color: red;">'''-'''</span>
:: <span style="color: red;">'''3'''</span>'''rd''' party recovery &ndash; PACICC is entitled to first priority against amounts received by the insured from third parties with respect to the loss for which PACICC provided payment

That question appeared as part (c) on the following exam, and the examiner's report listed the first 3 answers above:

: [https://www.battleactsmain.ca/pdf/Exam_(2019_1-Spring)/(2019_1-Spring)_(12)_v2.pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style="color: red;">'''(2019.Spring #12 - part c)'''</span>

Unfortunately, this is another repeat exam question where the examiner's report from one year provides a different answer from another year. In particular, the examiner's report answer for part (b) of the following very similar exam question was somewhat different:

: [https://www.battleactsmain.ca/pdf/Exam_(2019_2-Fall)/(2019_2-Fall)_(10).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style="color: red;">'''(2019.Fall #10 - part b)'''</span> 

You could argue that the '''2019.Fall''' question asked for more details than just sources of funding, but I still don't think it was very clear. If I had been answering that question, I probably would also have quoted the assessment formula ''(and the assessment limit of 1.5% x DWP <u>of</u> each insurer):

: '''A = B x (C/D)'''

where

: A = Insurer assessment
: B = Total amount assessed by PACICC = (amount advanced by PACICC) minus (amount recovered)
: C = DWP of insurer
: D = Total DWP of all assessed insurers

This calculation must be done <u>separately by jurisdiction</u>. Anyway, take a look at the examiner's report answer. The details are all included in various BattleCards in quizzes 3 & 4 below.

[https://battleactsmain.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=PACICC&suffix=Comp&section=all&subSection=all&examRep=all&examYear=all&examTerm=all&quizNum=3<span style="font-size: 20px; background-color: aqua; border: solid; border-width: 1px; border-radius: 10px; padding: 2px 10px 2px 10px; margin: 10px;">'''mini BattleQuiz 3]'''</span> <span style="color: red;">'''You must be <u>logged in</u> or this will not work.''' </span>

Regarding the funding mechanism of '''assessment:''' The assessment applies only to licensed, participating insurers in the jurisdiction where the insolvency occurred. There are also '''limits''' on the amount PACICC can assess and insurer, and limits on how much of the assessment the insurer would actually have to pay.

[https://battleactsmain.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=PACICC&suffix=Comp&section=all&subSection=all&examRep=all&examYear=all&examTerm=all&quizNum=4<span style="font-size: 20px; background-color: aqua; border: solid; border-width: 1px; border-radius: 10px; padding: 2px 10px 2px 10px; margin: 10px;">'''mini BattleQuiz 4]'''</span> <span style="color: red;">'''You must be <u>logged in</u> or this will not work.''' </span>

==BattleCodes==

Memorize:
* purpose of PACICC
* 4 funding mechanisms
: &rarr; Note that only 3 are now accepted by the CAS graders. See ''[[PACICC.Comp#Funding_and_Assessment | Funding and Assessment]]'' for details. 

Conceptual:
* difference between OSFI's and PACICC's roles regarding insolvencies

Calculational:
* policyholder recovery/compensation in the event of an insolvency
* ''(insurer assessment - note that this is a low probability question)''

[https://battleactsmain.ca/FC.php?selectString=**&filter=both&sortOrder=natural&colorFlag=allFlag&colorStatus=allStatus&priority=importance-high&subsetFlag=miniQuiz&prefix=PACICC&suffix=Comp&section=all&subSection=all&examRep=all&examYear=all&examTerm=all&quizNum=all<span style="font-size: 20px; background-color: lightgreen; border: solid; border-width: 1px; border-radius: 10px; padding: 2px 10px 2px 10px; margin: 10px;">'''Full BattleQuiz]'''</span> <span style="color: red;">'''You must be <u>logged in</u> or this will not work.''' </span>

&nbsp;&nbsp;[https://www.battleactsmain.ca/vanillaforum/categories/pacicc-comp<span style="font-size: 12px; background-color: lightgrey; border: solid; border-width: 1px; border-radius: 10px; padding: 2px 10px 2px 10px; margin: 0px;">'''Forum'''</span>]

==POP QUIZ ANSWERS==

4 <u>internal</u> causes of insurer insolvency: [Hint: <span style="color: red;">'''GoNGS'''</span>] ''(See [[Dibra.Fail]])''

: <span style="color: red;">'''G'''</span>overnance & internal controls ''(<u>breakdown</u> of governance)''
: <span style="color: red;">'''N'''</span>ew entrants ''(they are <u>inexperienced</u> & subject to established competition)''
: <span style="color: red;">'''G'''</span>rowth ''(<u>rapid</u> growth produces a high proportion of new business, which usually has higher loss ratios)''
: <span style="color: red;">'''S'''</span>ize ''(insurer may be too <u>small</u> to absorb large losses)''